Crossboundary Access Open Sources Project Financing Tools Used to Finance Over $80m of Mini Grids in Africa
CrossBoundary Access, in collaboration with the Shell Foundation, has taken a significant step by open sourcing its project financing tools, which have been utilized to structure and finance over $80 million worth of mini-grid projects.
Mini grids represent the most cost-effective means of delivering electricity to approximately 260 million people in Africa, playing a pivotal role in achieving universal energy access across the continent. These projects, however, are complex infrastructure assets, typically requiring 12-24 months for financing and development.
CrossBoundary Access is making its project finance model available on its website and plans to share template project financing term sheets later in the year. The aim is to accelerate the flow of capital needed to achieve universal energy access in Africa by open sourcing these financial tools and approaches within the sector.
The International Energy Agency (IEA) has estimated that, by 2030, about 600 million people in Sub-Saharan Africa will still lack access to electricity. Mini-grids, which are self-sufficient electricity grids capable of serving households and businesses, are seen as a critical solution. They are the most cost-effective method to bring electricity to over 260 million people.
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However, financing mini-grid projects can be a lengthy and complex process due to factors like the small scale of these projects, long-term cash flow uncertainty, and the need to allocate revenues, costs, and risks over a multi-decade infrastructure investment horizon.
CrossBoundary Access aims to accelerate the development of the mini-grid sector by open sourcing the financial models and term sheets it has developed over the past six years, enabling the easier and more efficient flow of capital into this vital sector. This initiative draws inspiration from the open-source model that has been successful in the software industry and encourages industry collaboration for more effective progress in the energy access sector.
